Category: Tax Resolution Firms

The second most popular page on my personal blog lists the BBB ratings of tax relief firms. Unfortunately, I haven’t been able to keep up with that list over the past year, so it is woefully out of date.

However, I did recently find another Enrolled Agent by the name of Jay Freeborne that quite diligently maintains a very comprehensive list of tax resolution companies. When I found his list, he my company (Tax Help HQ) listed on the page of new and unknown firms, but after an email discussion, he moved us up to his “new, but acceptable” list. He called me an “interesting fellow”, which I’ll take as a compliment, and he seems like a good guy himself. I plan to meet with him in person in the next few weeks up in Seattle.

Since Jay does such a good job maintaining a list of new companies and the companies that are just going to take your money and run, I’m going to defer to his list if you are looking for that information. Here are his two lists:

TaxMasters, a tax resolution firm based out of Houston, TX, had been under investigation by the Texas Attorney General since 2010 for unethical sales practices. After finally going to trial earlier this year, a jury has passed down a verdict of $195 million against the firm. This amount includes $113 million in restitution to the firm’s customers, $81 million in civil penalties, and $1 million in attorney fees. The company was found guilty of 110,000 violations of Texas consumer protection laws.

Founder and CEO Patrick Cox himself must personally pay well over $40 million of the award from his own personal fortune.

The firm was primarily accused of failing to disclose it’s no-refund policy, and for failing to immediately start work on a client’s case, but rather waiting until fees were fully paid before even doing anything to protect clients.

The firm recently filed for Chapter 11 bankruptcy protection during the course of the trial.

If you were a TaxMasters client, however, don’t expect to actually get anything. In it’s bankruptcy filing, the company only listed $50,000 in assets, and it is unlikely that Patrick Cox possesses the $40 million assessed against himself.

So, what can you do if you’ve been screwed over by TaxMasters, or any other company. Here are some quick tips:

Contact your Revenue Officer immediately, to find out the status of your case in the collections process.

If you have tax returns that are overdue, get them filed immediately.

Assemble any financial information requested by your Revenue Officer.

Request a 120 day collections hold in order to give you time to put everything together and prepare a plan of attack, particularly if you can’t pay your tax debt in full.

If your tax situation is more complex than you are comfortable handling, then seek professional assistance from a LICENSED taxpayer representative (Enrolled Agent, CPA, or tax attorney).

It’s a travesty that unscrupulous companies such as TaxMasters, American, Roni Deutsch, and JK Harris have been screwing people over for years (TaxMasters complaints ran back to 2005). Always be weary of ANY tax resolution firm, and always conduct proper due diligence (yes, that includes if you are considering hiring us or somebody we refer you to).

Even if you already have representation, if you want a second opinion about your case or just want a licensed person to take a look at your situation, then from us and we’ll help you out.

Back in October, the largest tax resolution company in America, JK Harris, filed for bankruptcy under Chapter 11, which would have allowed them to continue operating and restructure their debts under a payment plan.

However, their largest creditor, which appears to have had a claim against the company exceeding $11 million, has decided not to allow them to restructure the debt, and has instead seized all the companies cash and assets in a liquidation of the company.

This means that, within the past 15 months or so, the 3 largest tax resolution firms in the United States have gone out of business, either by bankruptcy or government action. A little over a year ago, American Tax Relief in Los Angeles was shut down by the FTC, and the owners are facing numerous criminal charges. In early 2011, Roni Deutch was shut down by the California Attorney General, and Roni herself was disbarred and faced perjury charges.

JK Harris has been the target of several class action lawsuits regarding their sales practices and poor customer service. They have also been investigated by the Attorney General’s for several states.

If the closing of JK Harris has left you in a bad place regarding your tax matters, please contact me and I can steer you in the right direction.

When it comes to something as important as resolving your
tax liabilities, it is important to conduct research on the
tax resolution firm(s) you are considering before agreeing
to purchase their services.

What sort of things should somebody do as part of conducting
their “due diligence”?

First of all, visit the Better Business Bureau at www.bbb.com
and look for any complaints or outstanding issues that they
have with clients.

Second, you may actually want to turn to an unlikely source
for information on certain companies: Your IRS Revenue Officer.
Revenue Officers will not provide an unbiased opinion, of course,
and many of them will even tell you not to secure representation
(which is a violation of IRS policies for them to say, but they
still do it). However, your RO has probably worked with most
of the large, national tax resolution firms and can give you
their personal opinion on the firm if you ask.

Third, before signing a contract for taxpayer representation,
be sure to confirm that the firm that will provide your
representation will assign your case to a licensed representative.
You should be guaranteed that your representative is a licensed
attorney, licensed certified public, accountant, or a licensed
Enrolled Agent, before you sign any contract. The IRS will not
allow non-licensed representatives to negotiate for a taxpayer,
but you would be surprised at how often large firms have unlicensed
assistants doing the actual IRS negotiation.

Fourth, be sure to ask if the individual selling you the tax
resolution service if they have ever been involved in actual IRS
or state tax negotiations. Many times you will get a delayed
answer because that answer is “no.” Be weary of salespersons
that will base how they can help you from a sales script. Any
case-experienced salesperson should be able to walk you
through the case proceedings from start to finish.

Understand that hiring a representative to negotiate on your behalf
is not a guarantee that your case will be resolved. You will need
to work closely with your representative to ensure that your best
interests are always held in high regard. Although your
representative should do nearly all of the interaction with the
taxing authorities, your participation with your representative is
vital to the resolution process.

You will want to confirm that the fee you are paying for the
service you are purchasing is a flat fee. If you cannot get this
guarantee in writing, it is not a flat fee. Many salespersons will
state flat fee over the phone but will not guarantee this in
writing. If you do not understand the terms and conditions of your
representative’s contract, you may be trapped into receiving
unexpected requests for additional fees. For detailed information
on this heinous industry practice, read my “tell all” report here:

It is very important for you to keep in mind that most of the
time when you are speaking with a tax resolution firm, you are
speaking to a commissioned sales rep on the phone. These sales
reps usually have zero actual tax experience, and much of what
they tell you may have been passed to them from OTHER untrained
personnel. This is important to understand because it is not
uncommon for these salespeople to give blatantly incorrect
information to people simply so they can close a sale.

Armed with these tips, you should be better positioned to make
a wise decision regarding hiring professional tax services.

If so, you are obviously aware of the recent actions against the company by the California Attorney General, which has seized all the company’s assets. In fact, Rony Lynn Deutch herself was disbarred and is facing criminal charges stemming from the AG’s investigation.

This situation has left many of Roni Deutch’s customers in a bind. If you are one of them, we understand and want to help you out. My name is Jassen Bowman, and I’m an IRS-licensed Enrolled Agent. I’ve been in the business for several years, and your case will be handled by myself personally. If you were left hanging by Roni Deutch, I’ll not only give you a huge break on fees, and also work something out so that you can pay the fee over time.

Call me directly at (877) 632-5083 so we can discuss your situation, and mention Roni Deutch.

Most tax resolution companies give you a quote for services based primarily on three things:

How much you owe the IRS

What kind of taxes you owe

How much the sales person thinks you can afford to pay THEM

Here’s a dirty little secret of the tax resolution industry that nobody else will tell you: The actual WORK required to resolve a case has very, very little to do with how much you owe or what kind of tax it is, and obviously nothing to do with how much of a fee you can pay for representation.

What makes a tax resolution case more complex has much, much more to do with other factors, such as:

the existence of other creditors

the status of your assets

whether or not their are existing levies or wage garnishments

how long you’ve been accruing a tax liability

your past efforts (or lack thereof) to resolve the issue

your ability to file missing returns quickly

whether or not your accounting is up to date

whether or not you are able to “stop the bleeding” and become current with present day filing and payment requirements (this is actually the single biggest factor)

Most companies have a minimum fee quote for doing an Offer in Compromise for you, and it’s generally higher than for doing a payment plan, because the OIC process takes 6 to 12 months from start to finish. Most companies will charge you anywhere from $2500 to $4000 for doing a BASIC Offer in Compromise for you, and this may or may not include filing appeals and dealing with levies, and most definitely does not include filing any tax returns for you.

Here’s the thing, though: Filing an Offer in Compromise is actually pretty simple, and the size of your tax debt and the tax type does NOT make it any more difficult. It’s the same form, the same financial analysis, whether you owe $14,000 in personal income taxes or you owe $4.5 million in unpaid employment taxes. Big surprise: The detailed financial analysis required for the business with the payroll tax debt isn’t that much more involved than the smaller personal tax liability, assuming you have proper financial records for the business.

Instead of getting a fee quote based mainly on how much you owe and what a salesperson gets a “vibe” that you can afford to pay, make sure you get a firm fee quote from reputable firms.